Kyndryl approach is to create in India for global markets: Lingraju Sawkar

Products and services created in the country can be adapted in other markets, he says

Kyndryl, the NYSE-listed technology company, seems to be on the growth track a year after splitting from IBM. Lingraju Sawkar, president of Kyndryl India, believes gains from the firm's strategy are visible. In an interview with Shivani Shinde in Mumbai, he spoke about the new company structure and growth.

Kyndryl has completed a year as an independent firm. How has been the journey?

There are four parts of our journey: customers, employees, government, and communities. When we started as a firm, from a customer perspective, we made a promise and a commitment that was different from what we were in the past. The first phase of our transition was making that promise and condensing that. Close to 99 per cent of the customers transitioned to us.

Second was employees. For them the change was significant, as from a large company we became a start-up.

A common theme in the case of both these was that as a company the shift was from a technology company to a services company. This means that the customer becomes the centre. In a technology firm, the tech is the core. This meant we had to expand our partnership with other technology players, as we are now technology agnostic. This also means our addressable market opportunity doubled globally and in India as well, from $240 billion to $530 billion.

For employees, we embarked on a cultural journey. Our message to employees is to have a firm that is flat, faster, and more focused.

What have been the results?

A few positive things that we have seen over the last one year is that there are clear signs of green shoots. Our business grew with the existing customers we had, but we were also able to extend and renew their contract with us, and (it) also gave newer businesses the new capabilities that we have put together. The culture journey has reflected very well with employees as well.

Because we are a tech-agnostic company, building partnerships and alliances has been important. We signed contracts tied to cloud hyper-scaler alliances with an aggregate value of $1.2 billion in fiscal year 2023, exceeding the $1-billion target for the year. Kyndryl also expanded its cloud-related capabilities, with 35,000 hyper-scaler certifications among its employees at the end of the fiscal year, a 100 per cent year-over-year increase. In India, the total certification number was 29,000 across newer skill sets.

How does India fit into Kyndryl’s roadmap?

India is one of the top 10 countries for Kyndryl, in terms of growth. India has one-third of our global talent pool. Also, India’s economic growth has been very vibrant and that is adding to the opportunities. When we look at India, there are two strategies: ‘Kyndryl for India’ and ‘India for Kyndryl’. 

'Kyndryl for India' is about working with customers here. We are the largest managed services player in the country and we manage mission-critical applications for customers here in the sector such as BFSI, telcos, manufacturing, and others.

'India for Kyndryl' journey has been redefined after the split with IBM. Before the split happened our primary focus was delivering on service contracts. Now, India is also an innovation base. Our approach has been co-creation with customers. For instance, for one of our banking clients, we co-created a platform for their lending journey for the farm sector. Though farm loan is a priority-lending sector, the time taken to process the loan is anywhere up to three months. We developed a platform that brings down the processing of loan in 20 minutes.

Our approach has also been to create in India for the global markets. We have seen that products and services created here, for the local markets, can be adapted faster to other markets as well.

We have changed a lot from what we were. To give an instance, in BFSI we would earlier primarily have an infrastructure services play. Today, for some of the banks we have delivered platforms, with non-stop delivery. We have worked closely with clients like Holcim and Godrej in their migration journey to the cloud.

What work is being done at the innovation centres here and how big is the team?

One-third of our global employee base sits in India. Almost half of these are engaged in the innovation centres.

We recently said that Kyndryl Bridge platform, an open integrated technology services platform that integrates AI (artificial intelligence), is estimated to have already helped enable early adopters to avoid more than $1 billion in annual costs. Of this, $670 million have been cost avoidance by preventing an incident to happen. Kyndryl Bridge has been developed out of India. Our automation play has been built from India.

Kyndryl’s FY23 numbers have come down. How do you see the macro environment shaping growth?

We had called out earlier on how the business will look. We also called out of three things that will bring a turnaround in the business. First, accounts initiative. Part of this focus is on profitable business and get away from low and no-margins business. The total impact from this initiative (is) to be approximately $210 million of annualised benefits, surpassing the $200 million fiscal 2023 year-end goal.

The second was advanced delivery, which is built on an automation platform. As part of this focus close to 5,500 people who got released due to automation have been reskilled into newer work areas.

Third is alliances and creating partnerships. The hyper-scaler alliance story was not there before.

I would still think there is an upside of opportunity because we are expanding into newer areas and markets. For us, it’s still a growth opportunity.

What are your growth drivers?

From an IT perspective, there is a clear shift from classic IT to business IT. This is happening in every industry. Today our conversation with customers is not about cost.

The second shift is India specific; there is a vibrant spending in the economy. The third more significant driver is the consumerisation of IT. Now the discussion has moved away from service-level performance to user-driven performance.